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The recovery of the higher value of the assets that a company does not need is called the recovery of the investment. Idle assets are identified and then reused or disposed of as surplus, recovering considerable value in the process. In any organization, assets are always present. Machines or installations are bought, but over time they wear out to the point that they are no longer usable. This is where payback comes in. When doing this process, there are important principles to consider. It is important for companies to know these things because they can be very helpful for the environment in terms of asset disposal.

The first essential is the principle of equipment reuse. Idle equipment can be reused internally. Through an effective payback program, surplus equipment can be kept out of landfill rather than purchased new. Reusing any idle equipment reduces depreciation, insurance costs and capital. Instead of disposing of old equipment, a business can recycle it through oil conversion and save valuable chemicals; that can generate income and preserve resources. Hazardous waste and disposal costs can be reduced.

The second is reconditioning. An example of this is the reconditioning of toner print cartridges. They can be recharged and rebuilt and a company could save more money instead of buying a new one. In the payback program, pumps, motors and valves can also be salvaged and returned to service with some minor repairs. Reselling is also a good option for a company’s excess inventory. This reduces losses and increases the company’s income. In some idle assets, spent lubricating oils, metals and solvents can be recovered and this has a good effect on the environment by reducing waste, improving operating costs and preserving natural resources. In some cases, unwanted replacement parts and materials can be returned to the manufacturer for cash. To increase the return on capital and reduce the tax base, it is better to eliminate excess assets.

Asset recovery can be very beneficial to the organization. The most important benefit is that an average of 80% of the sales produced by the payback are recorded as profit. Companies have saved a significant $150 million a year through asset management. Obsolete materials, equipment, machinery, buildings and land fall under the category of assets. The investment recovery program also plays an important role in boosting company morale. Employees and shareholders feel good about working with a company they know for their ingenuity rather than wasting assets that are still useful. Not only does it prove to be beneficial to the environment, but it also contributes to the betterment of the company as a whole. The right people involved in the investment recovery program use specialized techniques to recover the highest value of an asset. They recover the scrap value, reuse it, recycle it, or return it to the manufacturer.

So it seems that regardless of what is best for the company, a payback program can be beneficial in terms of financial gains and help run an organization efficiently.